Utility Week

UTILITY Week 17th October 2014

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UTILITY WEEK | 17Th - 23rd OcTObEr 2014 | 13 Policy & Regulation Ofgem is seeking a move towards principles-based regula- tion, chief executive Dermot Nolan told delegates at the Util- ity Week Congress this week. Nolan said the regulator, which has come under fire for the unintended consequences of its market interventions, wants to move away from prescrip- tive regulation to a regime that focuses on treating customers EnErgY Ofgem seeks move to 'principles-based' regulation fairly. He said: "I want to see a smaller licence in the future, with the underlying principle of treating customers fairly." In a question and answer session, Nolan said: "There would be a general duty to treat customers fairly – the regulator would not be overly specific. You are placing the burdens on sup- pliers themselves to think about [what that means]." His comments were wel- comed by fellow panellists Ian Peters, managing director of British Gas residential, and Neil Clitheroe, Scottish Power's chief executive, retail and generation. However, Clitheroe asked: "Does that principle hold when something goes wrong?" He also questioned what would happen to the current detailed regula- tion under such a regime. This week Clegg pledges to ban unabated coal Lib Dem leader confirms his party's plans to introduce a ban as part of its five green laws The Liberal Democrat leader has pledged to ban electricity generation from unabated coal by 2025. Closing the Lib Dem conference in Glasgow, Nick Clegg confirmed his party's ambition to introduce the ban as part of the party's five green laws. The deputy prime minister confirmed that the pledges, which were made in the party's pre-manifesto at the start of September, will be a key part of the Lib Dem general election campaign. The proposed green laws include: a zero carbon Britain bill, which would introduce a decarbonisation target for electricity generation and ban electricity gen- eration from unabated coal; a heating and energy efficiency bill, which would create a national pro- gramme to raise the energy efficiency standards for all of Britain's households; a green transport bill, which would allow only low emission vehicles on the roads from 2040; as well as a nature bill and a zero waste Britain bill. The Lib Dem leader said it has taken "constant pres- sure" from his party – and in particular energy secretary Ed Davey – "to hold the Tories to their word" on the green commitments made by the government. He also took a swipe at prime minister David Cam- eron, who reportedly referred to the government's green levies on energy bills as "green crap", saying: "It's not green crap to us." Clegg's pledges and attack on the Conservatives echoed Davey's speech, in which he singled out Tory communities secretary Eric Pickles for "preventing Brit- ain getting the green power revolution it needs". MB EnErgY Call for scrutiny of Hinkley Point deal Shadow energy minister Tom Greatrex has called on the National Audit Office to review the subsidy arrangement for EDF Energy's Hinkley Point C new nuclear project. The funding deal, planned through the government's contracts for difference scheme, was approved last week by the European Commission, which found that the plans comply with European Union state aid rules. However, the opposition party is understood to have raised concerns that the deal might not be in the best inter- est of UK consumers, who will meet the cost of guaranteeing a revenue for the project. The Times reports that Grea- trex has written to the National Audit Office to ask for a review of the scheme to ensure consumers get the "best possible deal". Following the announce- ment last week that the deal has been approved, Greatrex said in a statement that value for the consumer, as well as transpar- ency and accountability, are important principles. "We will hold the government to account on the assurances it gave while the Energy Act was going through parliament that new nuclear deals will be subject to thorough scrutiny to ensure value for money," he said. Investment analysts at RBC Capital said the move from Labour might represent pre- election political posturing more than genuine concern. "Given that new nuclear in the UK was promoted with cross- party support, this strikes us as a case of political nit-picking," RBC Capital said. EnErgY Energy policy needs to support economy UK manufacturers have called on the next government to ensure that energy policy supports their ambitions for a better-balanced economy. Key points of manufac- turing organisation EEF's agenda include calling for the implementation of the Energy Intensive Industries compensa- tion package; a fresh approach to industrial energy efficiency and decarbonisation; and reform of the costs of decarbonising the power grid to energy consumers. EEF's head of climate and environment policy, Gareth Stace, said: "This is a wake-up call that the tension between the pursuit of low carbon policies and Britain's ambitions for a better-balanced economy must be resolved. Failure to do so could hit investment, margins and competitiveness, putting the brakes on growth and leav- ing our economy stuck in the slow lane." He added, "High energy costs are crippling for manufacturers of all sizes, but rapid implemen- tation of this scheme would at least reduce the burden on those who are most exposed." EEF claims the projected 50 per cent rise in electricity prices by 2020 could hit investment, margins and competitiveness for the manufacturing sector. Research from the body shows that rising energy costs could lead to a quarter of manu- facturers considering investment overseas. Almost 73 per cent of manufacturers said the projected rise would have a noticeable effect on profit margins, while 53 per cent believed it would affect their competitiveness. Unabated coal: proposed ban by 2025

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